The use of artificial intelligence in the hiring process promises a level of efficiency that would have been impossible just a few years ago. Employers can now deploy artificial intelligence tools that parse through applications almost instantly, score candidates on a 1–5 scale with accompanying reasoning, automatically sort applicants into pools, and even scan LinkedIn and other social media profiles to supplement evaluations. Some software claims to reduce screening time by as much as 75%. Yet this technological leap forward is not without concern. As artificial intelligence becomes more commonly embedded into our day-to-day life, it is almost inevitable that it becomes a part of employment decision-making. Regulators have begun to examine whether these supposedly neutral systems produce disparate impacts on applications for hire.
A Recent Settlement
This year, the U.S. Department of Justice’s Civil Rights Division announced a settlement with a Virginia-based IT services company, resolving allegations that it violated the Immigration and Nationality Act. According to the DOJ, the company used an artificial intelligence tool to generate job postings that improperly limited applicants based on citizenship status, including language restricting consideration to individuals holding H-1B, OPT, or H-4 visas, restrictions that are not authorized under federal law.
What is Wisconsin Doing?
While some jurisdictions have begun enacting targeted regulations governing the use of artificial intelligence in employment decisions, Wisconsin has not yet adopted state-level legislation specifically addressing artificial intelligence in hiring. That said, the issue is on its way to becoming a topic of discussion. On August 23, 2023, Tony Evers issued Executive Order #211, establishing the Governor’s Task Force on Workforce and Artificial Intelligence. The task force has been directed with the job of examining the current impact of generative artificial intelligence on the state’s labor market and developing informed projections about its future effects. Although its mandate is broadly framed, it is not difficult to anticipate that the task force’s work will surface concerns about how artificial intelligence decision-making intersects with existing employment laws, particularly in areas such as hiring, evaluation, and potential disparate impact.
Disparate impact claims are when a neutral policy or action may burden a protected class, such as a requirement of a high school diploma. Disparate impact claims can be defended if there is a business necessity. Use of artificial intelligence would not likely be considered a business necessity.
What are Other States Doing?
Although Wisconsin has yet to enact legislation directly regulating artificial intelligence in hiring, employers would be wise to look to other jurisdictions for a preview of what is on the horizon. For example, California has advanced legislative proposals aimed at curbing discriminatory uses of artificial intelligence in employment decisions. Another example from California is Assembly Bill 2602, which provides that certain provisions in employment or service agreements will not be enforceable where they authorize the creation or use of a “digital replica” of an individual’s voice or likeness. Similarly, Maryland, through H.B. 1202, has taken a more targeted approach by requiring transparency, adherence to ethical standards, and employee consent when AI-based facial recognition technology is used in the hiring process. Taken together, these emerging frameworks signal a clear regulatory trend. While artificial intelligence may enhance efficiency, its use in employment contexts will likely be increasingly scrutinized, and employers in Wisconsin should anticipate analogous restrictions developing in the future.
Just because there is still no statute squarely governing the use of artificial intelligence in employment decisions in Wisconsin, HR or recruiting teams still have obligations. Existing federal law, like Title VII and the Americans with Disabilities Act, applies regardless of whether decisions are made by a person or artificial intelligence software. Employers need to ensure that any AI tools used in hiring or employment practices do not create unlawful discrimination or a disparate impact.
Bottom Line
As a practical matter, the focus moving forward should be on getting a handle on what is already in place. That starts with identifying each AI system used in recruiting or HR, what decisions it influences, and whether those decisions touch legally protected interests. There should also be a requirement for meaningful human review before artificial intelligence-driven outcomes are acted upon. From there, employers should put a structure around compliance, document the artificial intelligence systems in use, prepare disclosure language where they deem it appropriate, and assign internal roles with responsibility for oversight. A regular review process is also important, both to monitor how the tools are performing and to keep pace with what is likely a changing regulatory structure. Even without a statutory deadline, the better approach is to address these issues now rather than waiting for regulation to force the issue.
This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.